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Money is a token of cooperation: the biology of indirect exchanges

Abstract: This article proposes a clear definition of money, as opposed to credit, by elaborating on the distinction between cooperation and altruism in biology. It argues that these fundamental concepts have been confused due to a sociocentric perspective on the meaning of cooperation. Money should be primarily seen as a store of value, meaning that it mediates interactions that are more constructive than reciprocal altruism. This situated definition explains the challenges typically encountered by monetary theorists, who emphasise either utility or symbolism. The invention of Bitcoin, the first form of digital money, provides central empirical support. Indeed, the value of bitcoins does not come from any intrinsic utility nor does it come from an institution. It has simply emerged on the internet, a social environment akin to the ecological environment in which trade has evolved. Like Bitcoin and other cryptocurrencies, money emerges naturally to enable indirect exchanges. This cooperative potential is seized by processes of social reproduction that transform money into credit.

Keywords: game theory, evolutionary social psychology, economic anthropology, definition of morality, social evolution, Stag Hunt, history of money